REPORT: JSW Steel in Negotiations to Buy London Mining
India’s third-largest steelmaker, JSW Steel Ltd, is reportedly in negotiations to acquire besieged iron ore producer, London Mining (LSE:LOND).
The UK-based company is struggling with declining iron ore prices, infrastructure woes and the ebola outbreak in Africa, where it operates a small mine. In addition, the company is riddled with debt, announcing last week it did not have enough cash to operate its only mine and was working to secure investors.
To make matters worse, London Mining was hit with an extra $2 a ton charge for docking their cargo ships in Sierra Leone, forcing the company to spend more on exporting its minerals.
Although a JSW spokesman could not comment, talks between the two groups have reportedly been going on for some time.
"Talks (with London Mining) have been going on for many months. JSW people have visited them also," said an unnamed source.
The debt-burdened miner is a prime candidate for a takeover; however, analysts and sources familiar with the situation believe JSW would still need to tackle many of the issues facing London Mining and its peers.
"Their operating cost is still too high against the current iron ore price. It's not a bad asset, but having so much debt when the iron ore price is so low, and when you're not generating free cash flow, just doesn't work," said analyst Carole Ferguson at SP Angel in London.
In addition to purchasing London Mining, the deal could potentially include African Minerals, a UK-based minerals exploration, development and mining company that owns a low-cost rail line and port in Sierra Leone.
News of the possible acquisition drove shares for London Mining up almost 18 percent on Monday.
Newmont acquires Canada’s GT Gold in $325mn deal
Newmont, the world’s biggest gold miner, has acquired Canada’s GT Gold in a deal worth $325mn. The gold giant now controls the Tatogga gold-copper project in the Traditional Territory of the Tahltan Nation.
“With the acquisition of GT Gold and the Tatogga project in the highly sought-after Golden Triangle district of British Columbia, Canada, Newmont continues to strengthen our world-class portfolio,” commented Newmont President and CEO Tom Palmer.
“We look forward to continuing to build a respectful and meaningful relationship with the Tahltan Nation, including the community of Iskut. The relationships we have with Indigenous communities, First Nations and host communities are critical to the way we operate. We will partner with the Tahltan Nation at all levels, and with the Government of British Columbia to ensure a shared path forward as the Company understands and acknowledges that Tahltan consent is necessary for advancing the Tatogga project.”
Newmont’s acquisition includes the Tatogga project, comprised primarily of the Saddle North deposit, which has the potential to contribute future significant gold and copper annual production. There are also further exploration opportunities beyond the known deposits at Saddle North within the land package. The Tatogga project adds to Newmont’s existing interest in the prospective Golden Triangle through the company’s 50% ownership in the Galore Creek project.
Newmont is the world’s leading gold company and a producer of copper, silver, zinc and lead. A world-class portfolio of assets, prospects and talent is anchored in favourable mining jurisdictions in North America, South America, Australia and Africa. The American miner is celebrating its 100th anniversary this month.
With gold prices on the rise, the last six months has seen gold industry M&A activity accelerating. A recent Mckinsey report, advises that the industry need to be mindful of mistakes made during the previous gold price boom, when growth was chased unidirectionally by several companies.